In a research report released Friday, Needham analyst Alan Carr downgraded shares of Cempra Inc (NASDAQ:CEMP) from Buy to Hold rating, as he sees management credibility as a key risk. The analyst remains deeply concerned by management’s decision to not disclose material adverse events (as well as clinical hold) from small Phase 2 trial of Solithera in COPD. Carr also acknowledges a smaller commercial opportunity for Solithera due to a less attractive safety profile than previously appreciated.

Carr noted, “We believe core asset Solithera will ultimately be approved by FDA and therefore has inherent value. However, we expect minimal stock movement up from current levels until either turnover in management and/ or regulatory approval. Given manufacturing concerns raised in Oct 2016, we believe the latter is unlikely until 2H17. Investors comfortable w/ a longer time horizon through 2H17 into 2018 may therefore benefit from owning the stock, but we also believe there is a cap to upside if current management is still in place at that time.”

As usual, we like to include the analyst’s trackrecord when reporting on new analyst notes According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Alan Carr has a yearly average return of 6.4% and a 44.5% success rate. Carr has a -22.2% average loss when recommending CEMP, and is ranked #411 out of 4200 analysts.

Out of the 13 analysts polled by TipRanks, 5 rate Cempra stock a Buy, 7 rate the stock a Hold and 1 recommends Sell. With a return potential of 221.7%, the stock’s consensus target price stands at $21.31.